Princeton explains why it charges tuition despite its multibillion-dollar endowment
The letter - written by Senator Orrin Hatch, Congressman Thomas W. Reed II, and Congressman Kevin Brady - was sent to schools with endowments of over $1 billion, according to the Harvard Crimson.
"Despite these large and growing endowments, many colleges and universities have raised tuition far in excess of inflation," stated the letter, which went out in February.
In their separate letters dated March 31, both Harvard and Princeton (with endowments of $37.6 and $22.7 billion, respectively) stressed they have robust financial aid programs that pay full tuition for many students who need it.
But both schools stressed the complexities of endowment spending, as each endowment involves thousands of funds that all may be charged with a different purpose.
"Today, Princeton's endowment is made up of more than 4,300 separate accounts, and the purpose supported by the largest number of accounts is financial aid," he continued. "Other accounts support faculty positions, research and teaching programs, library resources, and many other purposes."
In an apparent explanation of why the school still charges tuition, Eisgruber added, "Each student benefits from the educational opportunities we provide, and thus we believe it is appropriate to ask them and their families to contribute to the costs of their educations to the extent they are capable of doing so."
Endowment income has come under increased scrutiny, as elite schools have funds that balloon ever up, year after year. In March, the Connecticut Legislature proposed a bill that would tax income from Yale's $25.6 billion endowment, Bloomberg reported.
The legislation specifically targets schools in Connecticut with endowments of $10 billion or more. Yale is the only such school in the state with an endowment of more than $10 billion.